HC Deb 02 July 1923 vol 166 cc206-8

For the purpose of computing Super-tax in the case of any person who has received in any year income from a source that, during the late European War, was under the occupation or control of the enemy, the Special Commissioners, if they are satisfied that such income was earned in years other than the year of assessment, shall average such income over the various years during which they shall decide such income was actually earned.—[Mr. Samuel Roberts.]

Brought up, and read the First time.


I beg to move, "That the Clause be read a Second time."

I have put this new Clause down to meet a very serious case of hardship under the Super-tax Act. I can best explain the matter by giving the actual facts put to me by a taxpayer. This taxpayer has an income of about £1,000 a year, which is £1,000 below the Super-tax level. He held as an investment shares in the Malay Estates Rubber Company, which was a Belgian company, situated in Antwerp. Because it was situated at Antwerp during the War, and Antwerp was in German occupation, the company could not distribute the dividend for five years to its shareholders, otherwise they would have been confiscated by the Germans. The consequence was that after the Armistice the whole of the profits earned for a period of five years were distributed in March or April, 1919–20, and this man, who always before was £1,000 below the Super-tax level, and since has been below the Super-tax level, suddenly found himself, because of the German occupation, having to pay Super-tax. [HON. MEMBERS: "Oh!"] Hon. Members opposite seem to think that is an amusing circumstance. They consider that anybody earning any profits is a sinner If people do earn profits, they should be treated equally, one with another. I put this case forward simply on the ground that this man has suffered because of an act of war, through an act of the King's enemies, and, that being so, I ask the right hon. Gentleman to see if he cannot remedy this grievance. Possibly the answer may be that if he opened the door in this way he would be opening the door for many other instances. To that I would reply that if the other cases are as hard as this, it is time the door was opened and the other cases dealt with. This case does not mean opening the door for the future. This is a case due to an act of war, and it is not just that the man should be mulcted in this way.


I beg to second the Motion.

This is a case of correcting what is an unintentional error of legislation. In the ordinary way it is not intended that, if a man is debarred in one year from receiving his income and receives the arrears in subsequent years, that he should be taxed more heavily than if he had received it from year to year. Hon. Members opposite will sympathise with the principle if I say this—supposing, owing to some dispute or some alteration, Members of this House did not get their £400 one year, and the following year they received not only the £400 for that year, but the £400 for the previous year. It would be a little hard if Income Tax was taken as though the income was £800.


I almost accepted this Amendment, becouse the hon. Member for Hereford (Mr. S. Roberts) put a case of great hardship; but the hon. Member for Watford (Mr. W Herbert) enlarged the position so much, and showed the difficulties that would arise if I were to give any encouragement. The case quoted by the hon. Member for Hereford is a case of very great hardship and I wish it were possible to give the relief that he wants in regard to it. The moment I do that I let loose the whole difficulty as to Super-tax law. It has been decided recently in a Scottish case that Super-tax is chargeable for the year in which dividends are paid. If this Clause were accepted we should have the Super-tax payer coming to the Commissioners and saying, "This dividend was earned the year before last, only the company did not pay me, and I want to spread that over last year so that I shall not have to pay Super-tax upon it," and it would open up to the Commissioners a vista of all kinds of new calculations as to the incidence of Super-tax. The only way we can estimate the Super-tax is to take the dividend from the date on which it is paid and include it in the Super-tax for that year.


I am afraid that it is almost too much to expect to be able to shove my right hon. Friend over the edge, though he has gone so far, but what we ask is to be taxed according to the year in which the dividend is due to be paid. It has nothing to do with the time when it was earned. This is a payment which was due to be paid in previous years.

Question, "That the Clause be read a Second time," put, and negatived.